Who’s running my team: Philadelphia Phillies

One of a series of articles looking at the front office structure of each major league team. Today, we look at the Philadelphia Phillies.

Philadelphia Phillies

• Managing Partner: John Middleton
• President: Andy MacPhail
• General Manager: Matt Klentak

Middleton came to the Philadelphia Phillies from a singular background among owners: he inherited and for many years ran a cigar company. A Harvard business school grad, he eventually sold that company and used the proceeds to establish a holding company that oversees his family’s current interests. Those interests include several charitable enterprises in addition to the Phillies.

He first purchased a minority stake in the team in 1994, stepping into an oversight role when health problems forced chairman David Montgomery to relinquish his duties. Middleton obtained a controlling interest in 2016.

While generally ceding front office responsibilities to Klentak, Middleton has exerted some influence on broad operations, most famously when he green-lighted his tam’s pursuit of free agent Bryce Harper with his dismissive comment about “stupid money.”

To date, however, Middleton has not altered the core of the senior staff he inherited, including Klentak and MacPhail, who holds the title of president but who has functioned more as a senior advisor. That makes sense: MacPhail has been in baseball longer than Klentak has been alive and got his first GM job (in Minnesota) about the time the Phillies’ current GM was starting grade school.

For practical purposes, this has been Klentak’s front office since MacPhail hired him following the 2015 season. A Dartmouth economics grad, Klentak, and MacPhail worked together during MacPhail’s tenure running the Baltimore Orioles, so when MacPhail jettisoned GM Ruben Amaro Klentak – then an assistant GM with the Angels — was a logical candidate.

He’s now operating on a three-year extension committing to keeping him with the Phillies through 2022.

Forbes estimates the Phillies’ valuation at $1.85 billion, ranking the team ninth among the 30 clubs and second to the Mets in the National League East. That’s triple the estimated $537 million value from a decade ago. That news is tempered, however, by the fact that over that same span the Giants, Cardinals, and Angels have all passed Philadelphia in team value.

At $341 million, the team’s 2019 revenues rank 10th, having risen 46 percent over the decade. With its 6.1 million population, the Philadelphia market – the nation’s eighth-largest – generates a healthy $808 million for the team, the ninth highest total and right in line with the club’s valuation.

At $244 million, the Philadelphia Phillies are also ninth in brand-associated revenues.

This has not always translated to a profitable existence. Four times between 2012 and 2016 the Phillies operated at a net deficit, cratering at a $39 million loss in 2019. Since Middleton’s ascension, however, that situation has turned around. The Phillies have grossed at least $88 million in operating income in each of the past three seasons.

As might be deduced from his comments regarding Harper, Middleton has not been shy about spending that wealth. A mid-season trade with Seattle brought Jay Bruce – and his $14 million salary – to the Phillies. In concert with the arrival of Harper and a few other human baubles, the effect was to blow the team’s player costs from $119 million at the end of 2018 to $192 million one year later.

Projections are that the Phils will – for the first time in team history – top $200 million this season. The signings of free-agent pitcher Zack Wheeler (five years, $118 million) and shortstop Didi Gregorius (one year, $14 million) are the prime accelerants.

Whether all that spending will translate to victories is yet to be proven. In Klentak’s first four seasons, the Philadelphia Phillies are a combined 52 games under .500. Given the sorry state of the team when he arrived, that number in isolation is almost certainly unfair to Klentak, but this one isn’t. In 2018 and 2019, they are two games under .500, having finished 10 and 16 games out of first respectively. Based on Wins Above Average, the impact of Klentak’s personnel moves on Philly fortunes works out to -28.4 games. *

Even excluding his first two ‘building’ seasons, the impact of Klentak’s 2018 and 2019 moves still works out to -12.1 games.

Klentak’s big problem so far has involved an area where access to great gobs of stupid money probably has the least impact, farm system products. Since taking over for Amaro, Klentak has summoned 38 of them to the show, including several who were projected by now to comprise the team’s core: Rhys Hoskins, Zach Eflin, Scott Kingery, Nick Williams and Nick Pivetta.

That core still exists, but unless you count Hoskins (.226, 29 home runs, 85 RBIs), none has broken out of the supporting chorus. The cumulative impact of Klentak’s 38 callups on team fortunes amounts to -20.1 games. Among the 38, only pitchers Hector Neris and Seranthony Dominguez have produced a career WAA above +1.0.

Going forward, the additions of Wheeler and Gregorius atop last year’s edition of Harper are certain to thrust the team into 2020 pre-season speculation. As aggressive as the Phils have become, anybody overlooking them would do so at their own peril.

What the Phils have not yet shown is an ability to translate all that off-field aggression into on-field victories. The question isn’t whether you can pay Bryce Harper $330 million over 13 seasons or Zach Wheeler $118 million across five seasons. The question is whether they’ll produce at something approaching that value.

*This calculation is obtained by determining the net impact of all player transactions on team performance for the season(s) in question. Wins Above Average is a zero-based offshoot of Wins Above Replacement; thus, the final figure suggests the degree of positive or negative movement in the standings attributable to front office moves.